diff --git a/.changeset/light-mugs-speak.md b/.changeset/light-mugs-speak.md
new file mode 100644
index 000000000000..6f40066e6fcb
--- /dev/null
+++ b/.changeset/light-mugs-speak.md
@@ -0,0 +1,16 @@
+---
+"@biomejs/biome": patch
+---
+
+Fixed [#8254](https://github.com/biomejs/biome/issues/8254): The `noParameterAssign` rule with `propertyAssignment: "deny"` was incorrectly reporting an error when a function parameter was used on the right-hand side of an assignment to a local variable's property.
+
+The rule should only flag assignments that modify the parameter binding or its properties (L-value), not the use of its value.
+
+**Valid:**
+
+```js
+(input) => {
+	const local = { property: 0 };
+	local.property = input;
+};
+```
diff --git a/crates/biome_js_analyze/src/lint/style/no_parameter_assign.rs b/crates/biome_js_analyze/src/lint/style/no_parameter_assign.rs
index 960696aab93f..1bc0cc9fad33 100644
--- a/crates/biome_js_analyze/src/lint/style/no_parameter_assign.rs
+++ b/crates/biome_js_analyze/src/lint/style/no_parameter_assign.rs
@@ -148,10 +148,30 @@ impl Rule for NoParameterAssign {
 
                         match left.as_any_js_assignment()? {
                             AnyJsAssignment::JsComputedMemberAssignment(assignment) => {
-                                assignment.object().ok()
+                                if assignment
+                                    .object()
+                                    .ok()?
+                                    .get_callee_object_name()?
+                                    .token_text_trimmed()
+                                    == binding.name_token().ok()?.token_text_trimmed()
+                                {
+                                    return assignment.object().ok();
+                                }
+
+                                None
                             }
                             AnyJsAssignment::JsStaticMemberAssignment(assignment) => {
-                                assignment.object().ok()
+                                if assignment
+                                    .object()
+                                    .ok()?
+                                    .get_callee_object_name()?
+                                    .token_text_trimmed()
+                                    == binding.name_token().ok()?.token_text_trimmed()
+                                {
+                                    return assignment.object().ok();
+                                }
+
+                                None
                             }
                             _ => None,
                         }
diff --git a/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.js b/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.js
new file mode 100644
index 000000000000..664f565f6994
--- /dev/null
+++ b/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.js
@@ -0,0 +1,6 @@
+// should not generate diagnostics
+function copyParamValueToLocalProperty(input) {
+	const local = { a: 0, b: 0 };
+	local.a = input;
+	local["b"] = input;
+}
diff --git a/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.js.snap b/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.js.snap
new file mode 100644
index 000000000000..844dc4cf6dc7
--- /dev/null
+++ b/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.js.snap
@@ -0,0 +1,14 @@
+---
+source: crates/biome_js_analyze/tests/spec_tests.rs
+expression: parameterMutationDenyValid.js
+---
+# Input
+```js
+// should not generate diagnostics
+function copyParamValueToLocalProperty(input) {
+	const local = { a: 0, b: 0 };
+	local.a = input;
+	local["b"] = input;
+}
+
+```
diff --git a/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.options.json b/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.options.json
new file mode 100644
index 000000000000..c355e893080c
--- /dev/null
+++ b/crates/biome_js_analyze/tests/specs/style/noParameterAssign/parameterMutationDenyValid.options.json
@@ -0,0 +1,15 @@
+{
+  "$schema": "../../../../../../packages/@biomejs/biome/configuration_schema.json",
+  "linter": {
+    "rules": {
+      "style": {
+        "noParameterAssign": {
+          "level": "error",
+          "options": {
+            "propertyAssignment": "deny"
+          }
+        }
+      }
+    }
+  }
+}